Import Logistics’ Post

"Understanding Open account: Payment Methods, Goods Availability, and Risks in International Trade" In international trade, an open account transaction is a method where the goods are shipped and delivered before payment is due. Here's how it works in various aspects: Payment Method: The exporter ships the goods first and bills the importer, who is expected to pay at a later date, typically within 30, 60, or 90 days. Goods Availability to Buyer: The buyer receives the goods immediately upon shipping, without needing to pay upfront. This allows for immediate use or resale of the goods. Risk to Exporter: This method poses a high risk to the exporter, as there is a possibility that the importer might delay or default on the payment. Risk to Importer: The risk to the importer is low in an open account arrangement, as they receive the goods before making the payment. The primary risk might be receiving goods that don't meet their expectations or specifications. Open accounts are advantageous for importers but carry significant risks for exporters, especially in the absence of a long-standing trustful relationship.

📋 Essential Documents for Trade Finance 🌐💼 1️⃣ Letter of Credit (LC): A primary financial instrument that assures payment to the seller upon presentation of compliant documents. 2️⃣ Commercial Invoice: Detailed documentation of the transaction, including product details, quantities, and prices. 3️⃣ Bill of Lading (BOL): A document acknowledging the receipt of goods for shipment, serving as a title of ownership and a receipt. 4️⃣ Certificate of Origin: Establishes the source of the goods, aiding in compliance with trade regulations and agreements. 5️⃣ Packing List: An itemized list specifying the contents of each package within the shipment. 6️⃣ Insurance Documents: Proof of insurance coverage for the shipped goods, providing financial protection against loss or damage. 7️⃣ Purchase Order (PO): A document from the buyer specifying the products, quantities, and agreed-upon prices. 8️⃣ Proforma Invoice: A preliminary invoice sent to the buyer before the actual shipment, outlining the terms of the sale. 9️⃣ Transportation Documents: Includes transport-related documents such as airway bills, road transport documents, or rail transport documents. 🔟 Import/Export Declarations: Records of the traded goods, providing customs authorities with essential information. Ensure a seamless trade finance process by having these documents in order. Each plays a crucial role in facilitating financial transactions and meeting regulatory requirements. #TradeFinance #Documents #InternationalTrade #FinanceEssentials

Payment method or payment term is most important factor for any trade, it becomes more crucial in case of export & import shipments where seller & buyer are far away from each other. Exporters/importers should choose the payment terms wisely so that they can avoid the risk. In this article we shall understand International payment methods in details. #paymentmethods #internationalpayments #internationaltradecompliance #exportimport #letterofcredit #risks #riskassessment #shipping #export #cargo #import #freight #supplychain #customs #trade #tradefinance #internationalbusiness #crossbordertrade #internationaltrade #quotations https://lnkd.in/g3j2frG

Payment method or payment term is most important factor for any trade, it becomes more crucial in case of export & import shipments where seller & buyer are far away from each other. Exporters/importers should choose the payment terms wisely so that they can avoid the risk. In this article we shall understand International payment methods in details. #paymentmethods #internationalpayments #internationaltradecompliance #exportimport #letterofcredit #risks #riskassessment #shipping #export #cargo #import #freight #supplychain #customs #trade #tradefinance #internationalbusiness #crossbordertrade #internationaltrade #quotations https://lnkd.in/gmSDBda

Payment Terms in International Trade: A Guide In international trade, payment terms play a crucial role in ensuring a smooth transaction. They define the conditions of payment between buyers and sellers, outlining when, how, and in what currency payment is expected. Understanding payment terms is essential to avoid confusion, delays, or even legal issues. Common Payment Terms in International Trade: 1. Advance Payment: A portion of the payment is made before shipment, with the balance paid later. 2. Document Against Payment (DP): Payment is made when the buyer receives the shipping documents, ensuring the seller receives payment upon delivery. 3. Cash Against Documents (CAD): Payment is made upon presentation of shipping documents, ensuring the seller receives payment upon delivery. 4. Letter of Credit (L/C): A bank guarantees payment upon meeting specified conditions, offering security for both parties. 5. Document Against Acceptance (DA): Payment is made upon acceptance of goods, with the seller receiving payment upon presenting documents to the buyer. Incoterms: Incoterms define the responsibilities of buyers and sellers regarding transportation, insurance, and payment. Common Incoterms include: - EXW (Ex Works) - FOB (Free on Board) - CIF (Cost, Insurance, and Freight) - DDP (Delivered Duty Paid) Best Practices: - Clearly define payment terms in contracts - Understand local regulations and customs - Use Incoterms to clarify responsibilities - Consider insurance and financing options - Communicate with your partner to avoid misunderstandings By understanding payment terms and Incoterms, you can navigate international trade with confidence and minimize risks. Remember to always clarify payment terms in your contracts to ensure a smooth transaction. #PaymentTerms #InternationalTrade #Incoterms #Business #Finance #Logistics #SupplyChainManagement

Payment Terms in International Trade: A Guide In international trade, payment terms play a crucial role in ensuring a smooth transaction. They define the conditions of payment between buyers and sellers, outlining when, how, and in what currency payment is expected. Understanding payment terms is essential to avoid confusion, delays, or even legal issues. Common Payment Terms in International Trade: 1. Advance Payment: A portion of the payment is made before shipment, with the balance paid later. 2. Document Against Payment (DP): Payment is made when the buyer receives the shipping documents, ensuring the seller receives payment upon delivery. 3. Cash Against Documents (CAD): Payment is made upon presentation of shipping documents, ensuring the seller receives payment upon delivery. 4. Letter of Credit (L/C): A bank guarantees payment upon meeting specified conditions, offering security for both parties. 5. Document Against Acceptance (DA): Payment is made upon acceptance of goods, with the seller receiving payment upon presenting documents to the buyer. Incoterms: Incoterms define the responsibilities of buyers and sellers regarding transportation, insurance, and payment. Common Incoterms include: - EXW (Ex Works) - FOB (Free on Board) - CIF (Cost, Insurance, and Freight) - DDP (Delivered Duty Paid) Best Practices: - Clearly define payment terms in contracts - Understand local regulations and customs - Use Incoterms to clarify responsibilities - Consider insurance and financing options - Communicate with your partner to avoid misunderstandings By understanding payment terms and Incoterms, you can navigate international trade with confidence and minimize risks. Remember to always clarify payment terms in your contracts to ensure a smooth transaction. #PaymentTerms #InternationalTrade #Incoterms #Business #Finance #Logistics #SupplyChainManagement #EXPORTS #IMPORT

Incoterms & Payment Terms critical components serve as guiding frameworks that dictate responsibilities, risks, and financial obligations between buyers and sellers. While both Incoterms and payment terms play pivotal roles in facilitating smooth transactions, they differ significantly in their scope and focus. Understanding the similarities and differences between these two aspects is essential for ensuring effective logistics operations and fostering successful business relationships in the global marketplace. Similarities: Contractual Nature: Both Incoterms and payment terms are contractual agreements negotiated between buyers and sellers to establish terms of sale and define the responsibilities of each party. Risk Allocation: Both frameworks address risk allocation in international transactions. They outline which party bears the risk of loss or damage to the goods during transit, thereby clarifying liability in case of unforeseen events. Clarity and Transparency: Incoterms and payment terms contribute to clarity and transparency in international trade by clearly defining the rights and obligations of each party involved in the transaction. Differences: Scope: Incoterms primarily focus on the allocation of responsibilities and costs related to the physical movement of goods, including transportation, insurance, and customs clearance. Payment terms, on the other hand, govern the timing and method of payment for the goods or services exchanged. Financial Aspect: While Incoterms address the physical aspects of the transaction, payment terms specifically outline the financial terms, including the currency, payment method, and payment schedule agreed upon by the parties involved. Legal Framework: Incoterms are standardized by the International Chamber of Commerce (ICC) and provide a universally recognized set of rules for international trade, whereas payment terms may vary depending on the negotiation between the buyer and seller and may be subject to legal and regulatory requirements. In summary, while both Incoterms and payment terms are integral to supply chain management and international trade, they serve distinct purposes and address different aspects of the transaction process. Understanding the nuances of both frameworks is essential for mitigating risks, ensuring compliance, and fostering mutually beneficial relationships in the global marketplace. #procurement #supplychainmanagement #knowledgesharing #sharingiscaring

🌍 Exploring International Trade: The Commercial Invoice 📑 #Export #Import #InternationalTrade #Invoicing In the world of global commerce, the Commercial Invoice plays a pivotal role! 🌐 📜 What is it? The Commercial Invoice, also known as the Customs Invoice, is a crucial legal document. It's issued by the seller to the buyer in international sales transactions. 📦 Why is it important? It serves as solid proof of the sale, benefiting both buyer and seller. Additionally, customs authorities rely on it to calculate duties and taxes on the shipment. 💼 More than just numbers! Unlike a standard invoice, a Commercial Invoice provides detailed information about the merchandise, including price, quantity, and other vital conditions of the sale. 💳 Payment Matters! Sometimes, it's not just about the goods but also about payments. This document may be needed when transactions involve letters of credit, ensuring smooth fund release. Understanding the Commercial Invoice is a must for anyone involved in global trade. 🌎💼 #BusinessInsights #TradeDocumentation

#𝐅𝐢𝐯𝐞_𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭_𝐭𝐢𝐩𝐬_𝐟𝐨𝐫_𝐬𝐮𝐜𝐜𝐞𝐬𝐬_𝐢𝐧_𝐭𝐡𝐞_𝐢𝐦𝐩𝐨𝐫𝐭_𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝟏- 𝐃𝐞𝐞𝐩 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫 𝐫𝐞𝐬𝐞𝐚𝐫𝐜𝐡 : Before entering into an agreement with a foreign supplier, carry out a deep research. Check the company reputation, his commercial assurances, the quality of its products and their others customers experience. Do not hesitate to ask for references and Contact others companies that have dealt with the same supplier. 𝟐- 𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝 𝐭𝐡𝐞 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐭𝐚𝐱𝐞𝐬 : Each payroll has its own import and tax regulations. Make sure you understand the customs laws and requirements of the country of origin as well as those of your own country. This includes customs prices, import taxes, health regulations and others specifics requirements to the product you import. 𝟑- 𝐍𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐓𝐞𝐫𝐦𝐬 : Discuss payment terms with your supplier. Letters of credit, secure bank transfers and Guaranteed payment methods provide a high level of security when making international transactions. Avoid cash payments or methods of unsecured payments which can increase the risk of fraud. 𝟒- 𝐌𝐚𝐧𝐚𝐠𝐞 𝐂𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐑𝐢𝐬𝐤𝐬 : Fluctuating exchange rates can have a significant impact on the cost of imported goods. Explore strategies to manage change risks, such as future contracts or the use of stable devices. Be aware of market trends changes and have a plan in place to minimize potential losses. 5- Anticipate Lead Times and Inventory: Shipping times and customs delays can affect your stock levels. Anticipate these delays in your planning to avoid stock shortages. Also make sure you have an efficient inventory management system to optimize your warehousing and minimize costs associated with excessive inventory. #wensala_group #ABONNEZ_VOUS

Using the correct commodity code to import goods can help save money and increase profits. Many importers use the commodity code provided by their supplier which is not necessarily the correct one. When was the last time you reviewed your commodity codes and the amount of duty you are paying? A quick conversation with our specialist advisors will either reassure you that your entries are correct or identify areas where savings can be made. Claims can be made for refunds of duty which has been overpaid for the past three years. https://loom.ly/erIlzTs Contact customsduty@dains.com to arrange a free, no-obligation call. #customsduty #internationaltrade #importer #imports #duty Terri Bruce Michael Overington Reena Champaneri Sarah Boyes Marie Otter Will Hopwood Heidi Marsden Daran Harding Dains Accountants Magma William Duncan Accountants HSKSG Isosceles Finance PSTAX S3TAX